10/2/2017 0 Comments Global IntegrationMy primary goal this week was to begin working on a topic that I have never studied before: commodities. Although I did have some background knowledge of what commodities are and how they are traded within the global stock markets, I did not know what effect they had on traditional equities and the economy as a whole. Through reading a research report on commodity pricing, I was able to get a grasp on what affects commodity prices, but more importantly, it prompted me to think about my own durable competitive advantage.
The major lesson I learned is that when considering the market for a commodity, you must consider the global perspective. In previous commodity pricing models, only a specific market was used. For example, researchers would calculate the iron prices of North America and Asia with two different sets of data. The researchers found, however, that by considering the global aggregate of supply and demand, the extreme overestimation of prices was eliminated. This shift from a regional to a global perspective signaled that commodities could be considered a global economy, showing the growing interconnectedness of different markets around the world. We have seen this trend of globalization grow throughout the past few years, especially the economic recession of 2008, when a failed U.S. housing market caused worldwide panic. This concept of globalization prompted me to think about my own place in the world of investing and business as a whole. Being half-Chinese, I understand the business markets of both the United States and China, the two largest economic powerhouses of today. As China’s economy grows out of its “adolescent” phase, many American investors and business will be expanding into the China. When this happens, they will need people with similar skill sets, who understand the language and culture of China, to facilitate those deals. This future area of business holds immense opportunity for me, so adding China-specific topics to my ISM research will allow me to further build up my personal competitive advantage and open up new opportunities in the future. Through the rest of the first semester, I hope to be able to continue my research into commodities in an effort to better understand what causes changes in the stock market and economy as a whole. The concept of globalization that was introduced to me will also motivate me to shape my research decisions for the rest of the year around building upon my personal strengths and solidifying my competitive advantage.
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